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A Tale of 2 Energy Companies

Written by: Marc Courtenay02/20/13 - 5:54 PM EST

Tickers in this article:
CHK ESV

NEW YORK ( TheStreet) -- Not all earnings reports have a dramatic flare to them. But one of the most controversial energy companies, Chesapeake Energy (CHK) , steps into the earnings spotlight early Thursday.

I'm not going to regurgitate all the old news about CHK. Wednesday, the drama continued in a positive way as an investigation by CHK's board of directors into outgoing CEO Aubrey McClendon's personal financing deals with company partners determined the deals didn't benefit McClendon improperly or cost the company directly.

In an Associated Press report Wednesday afternoon the company said that "no intentional misconduct by Mr. McClendon or any of the company's management was found."

What will be "found" on Thursday is how CHK did in its last quarter when it comes to EPS and sales revenue. The consensus of 32 analysts is for only 14 cents of EPS in the fourth quarter compared to the same year-ago quarterly EPS of 58 cents. It will be difficult to disappoint with such low expectations.

When it comes to revenue from sales, analysts are expecting $2.86 billion, which is a 4.8% improvement over the same quarter in 2011. The chart below paints the picture of CHK's price, EPS and revenue history over a one-year period of time. I'd describe all three as "flat to down!"

Another energy company that reports Thursday is not the most glamorous in its sector but it does consistently make money and even a few headlines. Ensco (ESV) hit a new 52-week high Thursday as it closed at $65.25.

ESV provides offshore contract drilling services to the oil and gas industry worldwide. The company has a P/E ratio of 12.4, below the S&P 500 P/E ratio of 17.7. Its forward, one-year PE is an appealing 9.06. Analysts expect a 19% increase in earnings per share over the year-ago quarter.

When it comes to sales growth and revenue, those same 35 analysts are looking for a year-over-year quarterly sales growth increase of 8.7%. That would mean a quarterly revenue number of about $1.09 billion. That, by the way, would bring the 2012 revenue growth to almost a 52% gain. Impressive!

Here's the one-year chart with the same metrics we used for CHK. ESV is one of my favorite companies in the oil services sector and this is one of the nicest looking charts, except for the line concerning its diluted quarterly year-over-year EPS growth.

Like you, I'll be listening and watching for explanations as to why the diluted quarterly year-over-year EPS growth line isn't going the same direction as the share price and the revenue. We may see ESV correct if the forward guidance isn't ebullient enough. That, in my opinion, would be a buying chance.